14 Apr Heading toward a more balanced market this summer?
Last week Toronto’s real estate figures were released and were inline with my expectations. We saw another strong month-over-month price increase for downtown Toronto real estate. The average semi-detached house in the 416 increased by 4.7% and is now back over the $1 million dollar mark. The last time a semi-detached home averaged over a million dollars in the 416 was last May.
Condos were the second best performer downtown, appreciating 3.5%, while detached homes saw only a slight uptick. It is clear the most affordable real estate is being squeezed higher by shrinking budgets due of tighter mortgage restrictions and low inventory.
We are also starting to see the narrative change in the media. Several outlets are now reporting a market rebound or strengthening market. I expect this to pour more fuel on the fire by reinforcing the generally positive attitude toward investing in real estate. I suspect there are many people right now kicking themselves for not buying last summer or fall.
Since interest rates are likely to remain accommodative in 2018 and there is no more government intervention on the horizon, the key moving forward will be inventory. Many believe this spring rebound will convince homeowners who are waiting out the market to sell soon. Others believe as sales improve, so will turnover and thus more inventory will be generated.
I am not sure this will create enough inventory, but it is still possible we are heading toward a more balanced market this summer with more options for everyone.
-Nick, April 13/2018
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